A Political Economy Analysis of Income Diversification Activities of Rural Households in the Northern Region of Ghana

Abstract

This study analysed income diversification activities of 1,194 rural households in the Northern Region of Ghana using data from the sixth round of the Ghana Living Standards Survey (GLSS) undertaken by the Government of Ghana, through the Ghana Statistical Service. We found that 92% of rural households were engaged in farm activities affirming agriculture as the dominant profession of rural households in the region. The number of income-generating activities undertaken by these households was significantly related to the size of the household, previous apprenticeship training acquired by the household head, ownership of a motor bike/car, and ownership by the household of specific physical assets which also provide information, communication and entertainment services, namely mobile phone, radio and television sets. The share of wage-based income in the total household income was significantly related to the age of the household. The overall income diversification index was positively influenced by the level of remittances and the number of rooms in the house; the latter allowed for increased possibility of renting rooms in the house to workers. We also established that overall income diversification index was associated with decreasing total household consumption expenditures and reduced food security at relatively low levels. However, this index was linked to increasing household consumption expenditures and improved food security at relatively higher levels. Our findings suggest that income diversification could be an important poverty-reducing measure if well-designed Community and State support programmes for rural households are implemented in the region under conditions of peace and good security.